Pensions Terminology is a glossary of terms which is produced in conjunction with the Pensions Research Accountants Group (PRAG).
Its purpose is to encourage all pensions professionals to speak the same language. It is revised and updated periodically and the current (eighth) edition was launched in June 2011. It is now recognised as a standard reference work.
If you have any comments regarding Pensions Terminology contact the Qualifications Department at firstname.lastname@example.org
The Eighth edition of Pensions Terminology is now available for free as a pdf only. You can download it here.
Pensions Terminology (Eighth Edition) is sponsored by Willis Towers Watson.
Copyright to Pensions Terminology has been ceded by PRAG to The Pensions Management Institute in recognition of our educational role. Attention of users is drawn to the existence of this copyright, but as both organisations are anxious to encourage standardisation of terminology for all those associated with pensions, the use of definitions of individual terms is encouraged.
Reproduction of larger sections will normally be permitted on application, provided that such use is acknowledged.
Neither PRAG, nor the members of any working party or committee thereof, can accept any responsibility or liability whatsoever (whether in respect of negligence or otherwise) to any pension scheme trustee or member or third party, wherever situate, as a result of anything contained in or omitted from this publication nor the consequences of reliance or otherwise on the content of this publication.
- ASSET CLASS
A collective term for investments of a similar type. The main asset classes are [equities], [bonds], cash, property, and [pooled investment vehicles].
Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value. In [pension schemes] these include items such as investments, debtors and cash.
- ASSOCIATED EMPLOYERS
Where one company directly or indirectly controls the other or where each is controlled by the same party.
- ASSOCIATED EMPLOYMENTS
Employment by [associated employers] where the [employers] have made arrangements with the same [occupational pension scheme].
The relevant statutory provision is s24 of the Income Tax (Earnings and Pensions) Act 2003.
- ASSURANCE ENGAGEMENTS
Engagements which provide an independent and professional opinion on the area reviewed.
An audit provides assurance over the validity of the [financial statements] and for certain types of [occupational pension scheme] whether contributions have been paid in accordance with the [schedule of contributions] or [payment schedule].
- ASSURANCE REPORTS ON INTERNAL CONTROLS MADE AVAILABLE TO THIRD PARTIES
See [AAF 01/06]
- ATTAINED AGE METHOD
A [funding method] based on prospective [benefits] (rather than [accrued benefits]) in which the [actuarial liability] makes allowance for projected earnings. The contribution rate calculated for future service is that necessary to cover the cost of all expected benefits which will accrue to existing [members] after the [valuation date] by reference to projected earnings throughout their future working lifetimes.
See also [GN26].
- ATTRIBUTION ANALYSIS
An analysis of the return achieved by a fund manager into its constituent parts (for example asset allocation and stock selection) to show where value is being added.
- AUDITED ACCOUNTS
The [financial statements] of an [occupational pension scheme], which include a report given by an [auditor] on the accounting information presented therein.
See also [auditor's report] and [auditor's statement about contributions].
- AUDITED ACCOUNTS REGULATIONS
The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 (SI 1996/1975) made under s41 PA95 which deal with the content of [financial statements] and the [auditor's report] of an [occupational pension scheme].